According to a source briefed on the Yahoo board's thinking, Yahoo hired Marissa Mayer to be its CEO because the board believes that she can make the company competitive with Google and Facebook.

On the one hand, of course Mayer and the board believe this.

Yahoo was one of the Valley's first big Internet success stories, and it has a long heritage of phenomenally successful tech products, highlighted by Yahoo Mail. It has 700 million users. It is a $17 billion company that should have high aspirations.

On the other hand: WHAT?!?!?!

Consider for a moment Yahoo's competitive disadvantages.

Google is a $200 billion company and the world's most perfect money making machine. People go to the site and literally type in the kinds of ads they would like to see. It has $30 billion in cash lying around. It has thousands of brilliant engineers. It is led by a cofounder, Larry Page, who is widely revered by software engineers across the world.

Facebook is a $65 billion company with a product that 900 million people use every month. That user-base is still growing. It has $16 billion in cash lying around. It is led by two people: a cofounder, Mark Zuckerberg, who is considered to be a product genius and intuitive corporate strategist, and Sheryl Sandberg, the executive who helped build Google's money machine.

Yahoo, meanwhile, is now worth about $10 billion if you exclude its non-strategic Asian investments. It has maybe $5 billion laying around in cash. It has 700 million users, but that number isn't growing anymore because it's dependent on Web-based email, a technology teens don't use and older people prefer to access from their mobile phones, where Yahoo is weak. It has, for years, lost engineering talent to hotter Silicon Valley companies, including Facebook and Google. It is led by a first-time CEO who is its fifth CEO in a year, and its seventh in the last decade.

It was in part because of these competitive disadvantages that lots of industry people liked interim CEO Ross Levinsohn's plan for Yahoo.

He was going to sell Yahoo's ad tech to Google, partner with Facebook to get lots of traffic and sell ads, and double down on Yahoo's strength: creating content (sports and finance, mostly) that attracts users to Yahoo sites.

I think the idea that Yahoo was ever a “truly great technological innovator” is a myth. Yahoo’s strength has always been its audience and media assets, not its great technology.Their last two CEOs have been “product leaders” who could “help return the company to its roots of product development and technical innovation.”

It hasn’t worked. The more Yahoo tries to fight Google, Facebook and the like on the front lines of product/technology innovation, the more it plays into its opponents’ strengths, and the farther behind it falls. Yahoo has been tilting at windmills trying to fight Google for more than 10 years, and the results are clear.

A CEO who understands the media opportunity and understands that, in the world of media, “good enough” is good enough when it comes to technology, feels like the right leader for Yahoo. That’s what Ross Levinsohn (and his plan) felt like to me, and I think it was going to work. Was it going to create a $200B market cap company fueled by dramatic product innovation? I doubt it. But if you want to build that company, you would be better off doing it from scratch.